A long legal dispute over property tax breaks in Scarborough’s seaside neighborhoods could finally be over.

The controversy dates back to 2012, when an assessor increased land values in waterfront areas. Some property owners did not feel the full impact of that increase because of a widespread but little-known tax break for people who also own a vacant adjacent lot. For more than 30 years, a Scarborough homeowner could ask the assessor to value two lots as if they were one, and the assessor would consider the secondary lot at less than its fair market value.

Town and state officials said that practice was common across the state. But neighborhood residents filed a lawsuit in 2014 that claimed it was unconstitutional, and the state’s top court agreed in 2016.

“Maine law does not permit the town to engage in the fiction of treating separate smaller abutting lots as if they were a single larger lot, which results in an assessment that does not reflect just value,” the decision read.

The Maine Supreme Judicial Court ordered the town’s Board of Assessment Review to make “appropriate abatements.” Since then, the parties have disagreed on how to calculate those abatements for about 50 property owners. Those plaintiffs live in three waterfront areas – Pine Point, Prout’s Neck and Higgins Beach.

Scarborough officials decided in 2017 that the abatements would be 8 percent to the land values because that total would equal the amount avoided by people who got tax breaks on their adjacent lots in recent years. The town made those payments with interest that year, and the sum was more than $461,000.

But the taxpayer plaintiffs argued they were entitled to abatements of more than 31 percent to their land values. They claimed that number would represent the average discount for people who had participated in the abutting-lot program.

The parties disputed that calculation in Superior Court and then the Supreme Judicial Court. The justices on Monday sided with the town and acknowledged the complicated history of the case.

“While our instruction on remand was for the Board to provide the Taxpayers with appropriate abatements to remedy this inequality,  we recognize that this was a challenging directive given the complicated and unsettled nature of this area of the law. … The somewhat tortured progression of this matter after our remand demonstrates a need for further guidance regarding the range of proper remedies in circumstances like these,” Justice Donald Alexander wrote in the decision.

The opinion noted that the town does not have the power to retroactively send a higher tax bill to people who got breaks on their adjacent lots. The justices noted that thousands of property owners paid slightly higher taxes because of the adjacent lot program, and the remedy suggested by the plaintiffs could ultimately hurt them further.

“Of course, providing any abatements will have some effect on nonappealing taxpayers – that is unavoidable – but for us to hold that municipalities are required to provide the full extent of the improper benefit in cases like this could establish a dangerous precedent,” Alexander wrote. “Consider if instead of approximately fifty appealing taxpayers there were 500? It is not an unthinkable scenario given that the Taxpayers here have no better claims of discrimination than do the thousands of nonappealing taxpayers who were also negatively affected by the abutting lot program.”

The attorney who argued the case for the plaintiffs could not be reached Tuesday.

Scarborough Town Manager Tom Hall said the assessor no longer offers the tax break for “excess land.”

“This has been around for more than five years, so it’s been a challenge not just for us, but also for the appellants,” Hall said. “It’s never comfortable to have your residents take you to court for any reason. I’m certainly thankful to have this behind us.”

Michael Hodgins, the Bangor attorney who represented Scarborough, said the plaintiffs do not have any other appeal rights in state court, and he would not expect the case to continue to the U.S. Supreme Court level.

Both he and the town manager said they believe the dispute is at its end.

“We’re considering this to be a final determination,” Hall said.

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